Qihoo 360 Technology Co Ltd (NYSE:QIHU) is the leading internet platform company in China as measured by the active user base. Fox Business’ Charles Payne; Retail Analyst Hitha Prabhakar; Founder of Penn Financial group, Matt McCall, together with Monster Worldwide Senior VP, Joanie Courtney, and Belpointe Chief Strategist, David Nelson, talked on Fox Business about the Qihoo’s value and accounting concerns looming over Chinese companies.
Payne said that Qihoo 360 Technology Co Ltd (NYSE:QIHU) is a major player in the Internet security market in China. He added that Qihoo is looking to expand globally. He pointed out that Qihoo is number one in mobile apps and web browser and number two in search engines in China. He also said that they provide internet security to smartphones and PC’s.
He added that Citigroup has put a ‘Buy’ rating on Qihoo stock and set a target of $114. He said that Qihoo might take a larger market share, since they have a common search engine, which works in both PC’s and Mobiles.
“[...] The company was enjoying, get this, 475 million monthly active users on PC, 467 million on mobile. I think that this stock will continue to move higher. By the way, well beyond Citi’s target, I am being conservative, $124 is my first target,” he said.
He added that with a breakout Qihoo 360 Technology Co Ltd (NYSE:QIHU) stock might even go higher than $140 a share.
Nelson accepted that that Qihoo looks very promising. He said that the Qihoo stock seemed expensive initially, but further observation indicated the fast growth of this stock. He added that Qihoo stock is growing by 60%.
Nelson considered the accounting issues looming over Chinese companies in general as the only ‘Red flag’ to buy Qihoo 360 Technology Co Ltd (NYSE:QIHU) stock. He hoped that the presidency changes in China might revive the financial sector and clean up the accounting structure.
Payne added that accounting concerns are major reasons for many Chinese companies to collapse, even though they looked huge on paper.
McCall thinks that due to these accounting concerns, Chinese company stock is trading at lower valuations, compared to their peers in the US. He added that Qihoo stock has a PEG ratio of 0.98, whereas comparable company in the US have 50% higher PEG ratio. He feels that this is mainly due to the China effect that is hanging over the street. He said that he is impressed with the growth displayed by Qihoo and he feels that if the Shanghai Index keeps gaining ground, the value of Qihoo stock might grow even higher.
From the job market perspective, Courtney feels that the Cyber security and antivirus software are the hottest segments in current scenario and Qihoo works in both of them.
McCall and Nelson accepted that many investors skip on Chinese stocks, mainly due to accounting concerns and they think that if Qihoo can get over these concerns, they might turn out to be the next big thing in the street.